Harper delivers toolkit for dismantling the Australia Tax

CHOICE says draft competition report can pave the way for cheaper prices

22 September 2014

CHOICE says today's draft report from the Competition Policy Review can give Australians the benefits of more competition from overseas markets and new technologies.

Amongst a broad sweep of recommendations on competition policy, laws and institutions, CHOICE says it is pleasing to see a focus on axing what it calls the 'Australia tax' – the artificially high prices paid by local consumers for a range of goods and services.

"Our approach to competition must be about improving the everyday lives of Australians, and today's report has a real potential to benefit consumers, giving them access to cheaper goods and services," says CHOICE CEO Alan Kirkland.

"We provided evidence of the significantly higher prices Australians pay for identical products, ranging from new release movies, games and TV series to clothing and cosmetics.

"Today, the review has responded with support for market solutions to empower consumers and help them beat the 'Australia tax'.

"This includes exposing industries to greater competition from overseas, for example by reforming intellectual property laws, removing restrictions on parallel importing and giving Australians the confidence to get around barriers, like online geoblocking, that keep local prices high.

"There is also recognition that we need to transparently assess the consumer costs of intellectual property provisions in major trade agreements. This is one of our key concerns about the secretive Trans-Pacific Partnership trade negotiations," Mr Kirkland says.

CHOICE says the draft report also identifies a number of challenges, including around how competition and contestability can be introduced to sectors such as human services.

"As we have seen from Australia's electricity markets, simply providing consumers with more options is no guarantee of genuine competition, either on price or quality, especially when it comes to essential and complex goods and services," Mr Kirkland says.

"In areas like health and aged care, it is important to recognise quality services and good information are prerequisites for effective choice. Any moves in this area should be approached with caution," Mr Kirkland says.

CHOICE will respond to the Competition Policy Review's Draft Report with a further submission. CHOICE's full submission to the Issues Paper.